It was announced that NASA had informed Congress it was terminating its Commercial Orbital Transportation Services (COTS) agreement with Rocketplane Kistler (RpK) because the company had failed to meet financial milestones. RpK sent a letter to NASA to protest the decision.

On September 7th, 2007 NASA issued a default letter warning that it would terminate the COTS agreement with RpK in 30 days as the firm had failed to raise private funding to complete the K-1 launch vehicle by the July 31, 2007 deadline.

The Oklahoma City-based firm was one of two companies NASA selected in August 2006 to split $500 million in public funds to help build and demonstrate competing launch systems capable of delivering cargo to the International Space Station.

RpK however are protesting the decision, having sent a seven page letter to Horowitz in the latter part of last month. The letter cites actions made by NASA during Phase 1 of COTS as detrimental to RpKâ€™s efforts to secure investor revenue, ultimately leading to their failure to complete two COTS milestones.

In the letter RpK cite that they felt the decision not to include any ISS servicing in Phase 1 of COTS was a major omission from a financing standpoint.

â€œInput from potential investors, our investment bankers and strategic partners strongly confirms that failure to include a servicing component creates significant risks for any investorâ€

That's the first time I have ever seen do those photos. But for all the years they have been in business and the money they have spent you would think that they would have more of the launch vehicle completed. They have claimed for the past 5-6 years that the K-1 is "75% complete". Those photos do not indicate that they are anywhere that close to be being completed. Here's an article from over four years ago when Kistler filed for bankruptcy.

Quote:

Kistler Aerospace files for bankruptcy protection

Posted: Tue, Jul 22, 2003

Kistler K-1 illustration (Kistler Aero. Corp.) Kistler Aerospace Corporation, a startup company that tried to develop a reusable launch vehicle in the 1990s, filed for Chapter 11 bankruptcy protection last week, Space News reported in its July 21 print issue. According to the report, Kistler filed for Chapter 11 bankruptcy protection in Washington State on July 15, reporting assets of $6.3 million versus claims against the company of over $600 million. The filing is designed to provide the company with "greater flexibility to meet changing market demands and will ensure completion of the first K-1 vehicle," company officials said in a statement quoted by Space News. The company has received a $4.6 million loan from a group of financiers to allow the company to keep operating through the reorganization. The company, founded in the early 1990s, worked on developing a two-stage RLV called K-1. The company reportedly raised â€” and spent â€” several hundred million dollars on the K-1, but ran out of money before they were able to complete the vehicle. The company has been relatively inactive in recent years, although it did win a $125 million NASA contract in 2001 under the Space Launch Initiative to fly NASA test payloads on the K-1; that contract was contingent on Kistler completing the vehicle. According to a status report on the Kistler web site, dated May 1, 2003, the first K-1 vehicle is 75% complete.

This information about the K-1 being 75% compete had been removed from their website quite some time ago.

I am not surprised at all. Kistler has been dragging its feet for years. I have yet to see any photos of any hardware that they claim they have built.

Even though that is true, that is, from my point of view, not the reason why the investors pulled their money.

The fact is that they did managed to find money (surprisingly enough), but NASA themself put a stop to the willingness of the investors. No one wants to invest that kind of money if they think it is likely that they will get them back in some form.

75% complete? I wonder how did they came up with that one?
Maybe something like this?

K-1 development cycle:
1. prepare a cool looking design, not very realistic, but we will take care of the details later.
2. make some catchy powerpoint presentations about this.
3. make some even more catchy images and animations.
4. well, build that damn hardware everybody is asking about.